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on Labor Markets - Supply, Demand, and Wages |
| By: | Caldwell, Sydnee (University of California at Berkeley & National Bureau of Economic Research (NBER)); Haegele, Ingrid (Ludwig-Maximilians Universität München und Institut für Arbeitsmarkt- und Berufsforschung (IAB)); Heining, Jörg (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "Whether and how workers search on the job depends on their beliefs about pay and working conditions in other firms. Yet little is known about workers’ knowledge of outside pay. We use a large-scale survey of full-time German workers, linked to their Social Security records, to elicit pay expectations and preferences over specific outside firms. Workers believe that they face considerable heterogeneity in their outside pay options, and direct their search toward firms they believe would pay them more.Workers’ expected firm-specific pay premia are highly correlated with pay policies observed in administrative records and with workers’ valuations of firm-specific amenities.Most workers are unwilling to search for a new job—or leave their current firm—even for substantial pay increases. Switching costs are equivalent to 7 to 18 percent of a worker’s annual pay. Attachment varies across firms, and cannot be explained by either differences in firm-specific amenities or switching costs." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Betriebstreue ; Einkommenseffekte ; Einkommenserwartung ; abhängig Beschäftigte ; Kündigungsabsicht ; Lohnunterschied ; Präferenz ; Arbeitsbedingungen ; Unternehmen ; Arbeitsplatzwechsel ; zwischenbetriebliche Mobilität ; Arbeitsuche ; 2022-2024 |
| JEL: | J00 J30 J30 J31 J32 |
| Date: | 2025–03–12 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202504 |
| By: | Teutloff, Ole; Stenzhorn, Eliza; Kässi, Otto |
| Abstract: | This paper examines how worker skills and job application behavior contribute to the gender wage gap on a major online freelancing platform. We observe significant occupational sorting by gender, with women over-represented in lower-paying project categories and tending to earn less than men even within the same categories. The unexplained gender wage gap conditional on education is initially 39.9%, but it narrows to under 2% when accounting for differences in human capital and application strategies. Our analysis shows that application behavior, including job preferences and asking wages, is the primary factor, explaining up to 90% of the wage gap. We also find that women work on longer projects and achieve higher application success rates than men, which helps offset lower hourly earnings by accumulating more work hours. While men have slightly greater platform and traditional work experience it has minimal impact on wage outcomes. These findings suggest that the gender wage gap on the platform primarily reflects distinct usage patterns between men and women. |
| Keywords: | gender wage gap, gig economy, skills, human capital, flexibility, job application behavior, online labor markets, random forest regression |
| JEL: | J16 J24 J31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:314421 |
| By: | Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Maryna Tverdostup (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Labour shortages in Europe have led firms to adopt two key strategies automation and the employment of migrants. This study empirically examines the relationship between robot adoption and immigrant labour (differentiated by region of origin and education level) in Austrian firms using a novel dataset linking firm-level survey data on robotics adoption from Austria’s Information and Communication Technologies (IKTU ) surveys (waves 2018, 2020 and 2022) with registry-based employment records. Employing Poisson pseudo-maximum likelihood (PPML) estimations, we analyse firm-level employment decisions while controlling for firm characteristics, industry and region. Our findings show that firms adopting robots tend to employ more workers overall, particularly those with low and medium education levels. Notably, robot-adopting firms employ a higher share of low-educated migrants who are not from the European Economic Area (EEA), suggesting complementarity rather than substitution. However, automation appears to reduce the employment of highly educated migrant workers relative to natives. Distinguishing between industrial and service robots, we find that service robots have a stronger association with employment growth than industrial robots. The impact of robot adoption also differs by sector and is most pronounced in manufacturing, whereas its effects vary in the private service sectors. Our findings suggest that while automation can alleviate labour shortages, it may reinforce labour market segmentation. For EU policy makers, targeted interventions are needed to support the transition of migrant workers into higher-skilled occupations and to ensure that the benefits of automation are equitably distributed. Given the EU-wide relevance of automation and migration dynamics, these results provide insights that are also applicable beyond Austria. |
| Keywords: | Migration, automation, employment, firm- and worker-level analysis |
| JEL: | D22 J23 J24 J61 O33 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:262 |
| By: | Friedman-Sokuler, Naomi; Lavee, Einat |
| Abstract: | This paper explores informality in a high income country among women who, at least legally, can take on formal jobs. Specifically, we examine the determinants of paid domestic work in Israel through the lens of existing theoretical frameworks of informality. Using rich administrative data, we identify and characterize domestic workers and their labor market histories and estimate the prevalence and degree of informality. We complement this analysis with a qualitative analysis of interviews with 144 women living in poverty, who describe their choices vis-à-vis informal employment. We find that domestic workers in Israel are best described through a conceptual framework of Marginalized Agency. For them, informal employment is not a choice of last resort but rather a site of control and agency within highly constrained life situations. Nevertheless, the structural constraints associated with informality, in turn, limit the realization of their goals, especially with respect to economic and social mobility. |
| Keywords: | Informality, Domestic work, Poverty, Mixed methods |
| JEL: | J24 J46 I30 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1584 |
| By: | Antonia K. Entorf; Thomas J. Dohmen |
| Abstract: | Personality traits, preferences, and attitudes significantly influence labor market outcomes, and these non‐cognitive skills are shaped by the social environment. While curriculum interventions can impact these skills, the effect of compulsory education on noncognitive skills is less well understood. This study investigates the impact of extending compulsory education by examining educational reforms in four low‐ and middle‐income countries. Utilizing cross‐sectional data from the World Bank’s 2012/2013 initiative, we analyze the within‐country variation in compulsory education years. Our findings indicate that increased compulsory education decreases emotional stability, grit, hostile attribution bias, patience, and willingness to take risks, while enhancing openness to experience and alternative solution or consequential thinking. |
| Keywords: | Non‐cognitive skills, Education, Wage returns, Personality, Economic preferences |
| JEL: | J24 I20 I26 D91 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_674 |
| By: | Goenka, Aditya; Liu, Lin; Nguyen, Manh-Hung; Pang, Haokun |
| Abstract: | We model the impact of rising temperatures on labor productivity, labor market dynamics, and income inequality. Using a heterogeneous agent continuous-time (HACT) model with directed search, we analyze how temperature-induced productivity fluctuations influence the labor market, income and wealth in-equality, and wealth accumulation. The model features workers differentiated by wealth, productivity, and location, where temperature affects transitions be-tween high and low productivity states. Firms post fixed-wage contracts, and workers direct their job search across segmented labor markets. We calibrate the model using Vietnamese Labor Force data (2009-2018) matched with me-teorological records, capturing regional temperature variations. With increased temperatures, in low wage markets the ratio of vacancies to unemployed workers searching in those market falls, as labor productivity declines and falling wealth leads workers to direct their search to these markets when vacancies are also falling. The wage distribution shifts to the left, and average incomes and wealth fall. Climate-induced productivity shocks amplify income and wealth disparities as wealthier individuals are able to self-insure better against the income risk. The results underscore the role of climate change in shaping labor market inequality and provide insights into policy interventions that may mitigate its adverse effects. |
| Keywords: | Climate change; HACT model; Directed searc; Income inequality |
| JEL: | Q54 J64 J23 J31 E24 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130422 |
| By: | Jing Chen; Xiaojing Li; Xiaoqi Zhou; Rongjun Ao |
| Abstract: | An increasing number of studies confirm that regional diversification is path-dependent, with new industries building on pre-existing ones. However, these studies typically overlook the role of skill capabilities and the interactions between skills and industries. In this research, based on the concept of industry-occupation cross-relatedness, the influence of skill capabilities on industrial diversification across Chinese regions was investigated. Findings indicate that regions can diversify into skill-related activities following a skill path-dependent process. Furthermore, a theoretical framework integrating industry-occupation cross- relatedness and economic complexity was introduced, which enabled the adoption of various diversification strategies based on regional skill capabilities. |
| Keywords: | Industrial evolution, cross-relatedness, path dependence, skill capabilities, Chinese regions |
| JEL: | R23 J24 O18 R11 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:egu:wpaper:2508 |
| By: | Martha Stinson; Sean Wang |
| Abstract: | We introduce the Business Dynamics Statistics of Human Capital (BDS-HC) tables, a new Census Bureau experimental product that provides public-use statistics on the workforce composition of firms and its relationship to business dynamics. We use administrative W-2 filings to combine population-level worker demographic data with longitudinal business data to estimate the demographic and educational composition of nearly all non-farm employer businesses in the United States between 2006 and 2022. We use this newly constructed data to document the evolution of employment, entry, and exit of employers based on their workforce compositions. We also provide new statistics on the interaction between firm and worker characteristics, including the composition of workers at startup firms. We find substantial changes between 2006 and 2022 in the distribution of employers along several dimensions, primarily driven by changing workforce compositions within continuing firms rather than the reallocation of employment between firms. We also highlight systematic differences in the business dynamics of firms by their workforce compositions, suggesting that different groups of workers face different economic environments due to their employers. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-20 |
| By: | Maximilian Mähr |
| Abstract: | This paper studies how appointing a female professor through affirmative action affects hiring decisions and gender attitudes of faculty. For identification I use the introduction of a nationwide affirmative action policy in Germany that provides subsidies to departments appointing women to permanent full professorships. Using administrative data on all academic personnel employed at German public universities, I find that exposure to a female professor increases the share of female Ph.D. students but leaves hiring of women among full professors, assistant professors, and postdoctoral researchers unaffected. The rise in female Ph.D. enrollment is driven by individuals who completed their undergraduate studies in the same department. Additional findings show that after a woman joins the department, young male faculty members increase their collaboration with female colleagues. Further, I document that research productivity and direction are unaffected by the presence of an additional woman. |
| Keywords: | Affirmative Action, Gender Diversity, Women in Academia |
| JEL: | I23 J16 J24 J71 J78 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_677 |
| By: | Bobasu, Alina; Repele, Amalia |
| Abstract: | This paper investigates the role of firms in the transmission of monetary policy to individual labor market outcomes, both the intensive and extensive margins. Using German matched employer-employee administrative data, we study the effects of monetary policy shocks on individual employment and labor income conditioning on the firm characteristics. First, we find that the employment of workers in young firms are especially sensitive to monetary policy shocks. Second, wages of workers in large firms react relatively more, with some pronounced asymmetries: differences between large and small firms are more evident during monetary policy easing. The differential wage response is driven by above-median workers and cannot be fully explained by a worker component. Notably, larger firms adjust wages more significantly despite experiencing similar changes in investment and turnover compared to smaller firms. Furthermore, monetary policy tightening disproportionately impacts low-skilled and low-wage earners, while easings amplify inequality due to substantial wage increases for top earners. Overall, the effect of monetary policy on inequalities is however larger in easing periods – driven by a large increase in wages for top earners. JEL Classification: E24, E52, E58 |
| Keywords: | employment, labor market, monetary policy, workers type |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253046 |
| By: | Rémi Bazillier (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS-IRD); María Moraga-Fernández (Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne, CNRS-IRD, Ruhr University Bochum - Institute of Development Research and Development Policy) |
| Abstract: | Despite the widespread use of minimum wage policies to combat poverty in Africa, research on their effects remains limited. This paper addresses this gap by examining the economic impact of minimum wage shocks on firms across the African continent using firm-level data from the World Bank Enterprise Surveys. We document that all but four African countries have a minimum wage system. Between 2002 and 2019, we identify 13 shocks-defined as a 30% real increase-in 11 countries. Employing a difference-in-differences approach, we estimate the causal effects of these shocks on labor costs, employment, sales, and productivity. To address potential endogeneity, we instrument minimum wage changes using social protest intensity. We find that minimum wage shocks significantly increase labor costs per worker, suggesting at least a partial enforcement of regulations. However, we detect no robust impact on employment. Instead, firms partly offset higher labor costs through increased sales or productivity. We identify three complementary mechanisms: (1) a cleansing effect, where less productive firms exit; (2) capital investment as an adjustment channel; and (3) a local demand boost, with stronger sales effects in large markets |
| Keywords: | Minimum Wages; Africa; employment; firms; labor regulations |
| JEL: | J38 E24 O15 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:mse:cesdoc:25006 |
| By: | Damien Babet; Olivier Godechot; Marco G. Palladino |
| Abstract: | We use a newly constructed and quasi-exhaustive matched employer-employee database to study the contribution of firms to wage inequality in France. We implement a simple and tractable correction for the limited mobility bias. Our analysis, covering the period 2002-2019, reveals an increase in between-firm inequality, mainly due to the growing clustering of workers with similar market value. These phenomena are associated with increasing occupational specialization at the firm level. Our results highlight the importance of bias-corrected AKM estimates of the Abowd, Kramarz et Margolis (1999) model –hereafter AKM- in capturing the dynamics of wage inequality, and show how boThéobservable job types and unobservable individual characteristics contribute to these patterns.Classification-JEL: E31, E62 |
| Keywords: | Wage Inequality, Worker Segregation, Occupational Sorting, Employer-Employee Data |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:987 |
| By: | Abhishek KUMAR (University of Southampton); Apra SINHA (University of Delhi); Gazi Salah UDDIN (Linkoping University) |
| Abstract: | Using administrative plant-level data from India, we estimate the effect of revenue and cost uncertainties on markup (product market power), markdown (labour market power), and combined market power. We show that historical two- and three-digit industry averages of exports, imported inputs, and oil share are valid instruments for exports, imported inputs, and oil share at the plant level. The results suggest that revenue and cost uncertainties affect markup differently: revenue uncertainty decreases markup, whereas cost uncertainty increases markup. Despite the opposite effect of these uncertainty measures on product market power, revenue and cost uncertainties tend to increase combined market power. This is because the revenue uncertainty significantly increases labour market power. Heightened cost uncertainties reduce labour market power but by less compared to increases in product market power. Given the results obtained in this paper, it is important to make a distinction between revenue and cost uncertainty to understand their cyclical nature. |
| Keywords: | Markup, Markdown; Labour Share; Uncertainty; Exchange Rate Volatility; Oil Price Volatility |
| JEL: | D21 D22 |
| Date: | 2025–03–04 |
| URL: | https://d.repec.org/n?u=RePEc:era:wpaper:dp-2024-37 |
| By: | Luciano Mauro (Università di Trieste, DISPES and Duke University); Francesco Pigliaru (Università di Cagliari and CRENoS); Gaetano Carmeci (Università di Trieste, DEAMS) |
| Abstract: | This paper explores how civic capital shapes the relationship between government size and economic performance. Building on an exogenous-growth version of Barro (1990), we incorporate O-ring technology to capture task complementarity in the public sector, highlighting the role of civic capital in reducing errors and malfeasance. Our model shows that greater civicness not only raises the inverted U-shaped relationship between government size and output but also shifts it rightward, increasing both economic performance and the optimal government size. We test these implications using a dynamic panel data model for 23 OECD countries from 1975 to 2010, estimated via system GMM. Our results support the hypothesized inverted-U relationship and demonstrate that civic capital significantly raises the threshold at which the marginal returns to government size approach zero. Thus, countries with higher civicness can sustain larger public sectors without compromising growth. This finding provides fresh insights into how deeply institutional quality, rooted in social trust, shapes the government-size–growth nexus. |
| Keywords: | Social capital, Government size, O-ring theory, Economic growth |
| JEL: | O43 E02 H11 H21 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.07 |
| By: | Leonardo Ciambezi (Université Côte D’Azur, CNRS, GREDEG and Institute of Economics and l’Embeds, Scuola Superiore Sant’Anna di Pisa); Mattia Guerini (Department of Economics and Management, University of Brescia, Fondazione Eni Enrico Mattei, Université Côte D’Azur, CNRS, GREDEG and Institute of Economics and l’Embeds, Scuola Superiore Sant’Anna di Pisa); Mauro Napoletano (Université Côte D’Azur, CNRS, GREDEG, OFCE - SciencesPo and Institute of Economics and l’Embeds, Scuola Superiore Sant’Anna di Pisa); Andrea Roventini (Institute of Economics and l’Embeds, Scuola Superiore Sant’Anna di Pisa and OFCE - SciencesPo) |
| Abstract: | We develop a macroeconomic agent-based model to study the role of demand and supply factors in determining inflation dynamics. Local interactions of heterogeneous firms and households in the labor and goods markets characterize the model. Asymmetric information implies that firm selection is imperfect and depends both on firms’ relative prices and on their size. We calibrate the model on EU data by using the method of simulated moments and show that it can generate realistic inflation dynamics and a non-linear Phillips curve in line with recent empirical evidence. We then find that the traditional demand-led explanation of inflation stemming from a tight labor market only holds when selection in the goods markets is mostly driven by relative prices in comparison to firm size. Finally, we study the response of inflation to shocks impacting consumption, labor productivity, or energy costs. The results indicate that only demand shocks lead to wage-led inflation surges. Productivity shocks are entirely passed through to prices without affecting the income distribution. Energy shocks, instead, induce sellers’ inflation after changes in both firms’ cost structure and profit margins. This is in line with the recent empirical evidence for the Euro Area. |
| Keywords: | Inflation, agent-based models, market structure, mark-up rates, sellers’ inflation |
| JEL: | E31 E32 C63 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.10 |
| By: | Jesús Fernández-Villaverde; Yang Yu; Francesco Zanetti |
| Abstract: | Defensive hiring of researchers by incumbent firms with monopsony power reduces creative destruction. This mechanism helps explain the simultaneous rise in R&D spending and decline in TFP growth in the US economy over recent decades. We develop a simple model highlighting the critical role of the inelastic supply of research labor in enabling this effect. Empirical evidence confirms that the research labor supply in the US is indeed inelastic and supports other model predictions: incumbent R&D spending is negatively correlated with creative destruction and sectoral TFP growth while extending incumbents’ lifespan. All these effects are amplified when ideas are harder to find. An extended version of the model quantifies these mechanisms’ implications for productivity, innovation, and policy. |
| Date: | 2025–03–11 |
| URL: | https://d.repec.org/n?u=RePEc:oxf:wpaper:1072 |
| By: | Caldwell, Sydnee (University of California at Berkeley & National Bureau of Economic Research (NBER)); Hägele, Ingrid (Ludwig-Maximilians Universität München und Institut für Arbeitsmarkt- und Berufsforschung (IAB)); Heining, Jörg (Institute for Employment Research (IAB), Nuremberg, Germany) |
| Abstract: | "We use novel surveys of firms and workers, linked to administrative employer-employee data, to study the prevalence and importance of individual bargaining in wage determination. We show that simple survey questions accurately elicit firms’ bargaining strategies. Using the elicited strategies for 772 German firms, we document that the majority of firms are willing to engage in individual wage bargaining. Labor market factors predict firms’ strategies better than firm characteristics. Survey responses from nearly 10, 000 full-time workers indicate that most worker-firm interactions begin with the worker providing their salary expectations. Most interactions end with the worker rejecting the offer and remaining at the incumbent firm. There is substantial heterogeneity in workers’ bargaining behavior, which translates into within-firm wage inequality. Firms that set pay via individual bargaining have a 3 percentage point higher gender wage gap." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; IAB-Open-Access-Publikation ; Auswirkungen ; Beschäftigerverhalten ; Bewerbungsverhalten ; Einkommenserwartung ; geschlechtsspezifische Faktoren ; IAB-Betriebs-Historik-Panel ; Individualisierung ; Integrierte Erwerbsbiografien ; Integrierte Erwerbsbiografien ; Lohnfindung ; Lohnpolitik ; Lohnstruktur ; Lohnunterschied ; Tarifverhandlungen ; Unternehmen ; Arbeitsuchende ; 2021-2022 |
| JEL: | J30 J31 J42 |
| Date: | 2025–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202502 |